Teamwork divides the task and multiplies the success, an old saying goes. Done correctly, working together with your suppliers and vendors will achieve the same result. But in order to succeed, it’s important to set ground rules and formalize the agreement. The best way to do this is to establish a Partner-Performance Management (PPM) program.

A successful PPM program can do more than amend mistakes after the fact — once it’s up and running, the goal is to prevent mistakes and miscommunication.

At the heart of PPM is a simple method of operation:

• Identify each problem and diagnose the cause
• Come up with a solution that’ll eliminate the cause(s), and therefore future recurrences of the problem.

There are three strategic steps you can take.

• Checksheets for vendors/suppliers: What you expect by the end of the day; what you expect by the end of the week; what you consider to be unacceptable performance; and, if there was a problem, what the vendor/supplier will do to fix it.
• Performance scorecards: Identify what aspects of supplier/vendor performance are to be evaluated; decide how those evaluations will be made and measured, and share those results in such a way that the supplier/vendor can address and remedy problems.
• Incentives for performance improvement: Of course, you need to dangle a carrot at the end of the stick. Some ideas include overlooking minor errors; auditing fewer of the supplier/vendor shipments; looser requirements for declaring deductions, etc.

After all, you’re all on the same team with the same goal. Too many businesses choose to take an adversarial stance when working with suppliers/vendors.

The key to true success is for you to create ways to work together — and everyone can share in the rewards.

Tags: checklist, Partner-Performance Management, scorecards, supplier, vendor